NA stamps budget with majority

ISLAMABAD - Giving legal cover to the government’s premature taxation measures, the national assembly Thursday approved the Finance Bill 2013 with majority vote amid stiff criticism from the opposition parties.As the Supreme Court is hearing a suo moto notice on imposition of increased GST (general sales tax) rate even before passage of the budget, the PML-N government has secured a ‘legal’ stamp from the legislators on the increased GST and its other taxation measures.One percent GST increase (from 16 to 17 percent) would now be effective from June 13, a day after the announcement of budget. The passage of Finance Bill also allows imposition of additional 9 percent tax on CNG stations and now there would be 26percent GST on CNG owing to the value addition method based on input adjustment.According to a key amendment in the finance bill, Auditor General Pakistan (AGP) shall have powers to exempt expenditure of secret service agencies, certified by the government as relating to national security, from the scope of audit.The opposition parties, including Pakistan Peoples Party Parliamentarians (PPPP), Tehreek-e-Insaf (PTI), Muttahida Qaumi Movement (MQM), Jamat-e-Islamai (JI) and Awami Muslim League (AML), strongly criticised the budgetary proposals and termed it “IMF budget”.Finance Minister Ishaq Dar, who moved the bill in the house, termed the budget a road map for sustainable economic growth and economic development of the country. He denied that government has prepared the budget on IMF dictation.“IMF has termed Rs207 billion new taxes insufficient for meeting Rs2.475 trillion target set for next fiscal year, as the Fund wanted us to take Rs475 billion fresh taxation measures in the budget, but we refused it,” he claimed. Talking about the new loan programme, Dar said the government would like to take IMF loan as per its “own terms and conditions”. “New IMF loan programme or no programme, (but) no more taxes, IMF has been told”, Dar assured the assembly.To give relief to the persons having income below Rs2.5 million, federal government has amended proposed income tax slabs for the taxpayers. Income tax rebate for teachers and researchers have been reduced from 75 percent of their taxable income to 40 percent of their taxable income. Earlier, the government had withdrawn the entire 75 percent rebate owing to misuse of this facility.Provisions of Income Support Levy would not be applicable to any mutual fund, licensing authority shall certify any foreign TV drama for screening and viewing on any landing rights channel, advance tax shall be collected as per First schedule. Around 12% advance tax would be collected of the imported foreign film for the purpose of screening and viewing in Pakistan. Pakistan Media Regulatory Authority shall collect 20% tax as per permission fee or renewal fee from IP-TV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel, and Landing rights.While clarifying the position on many issues raised by the opposition parties, the finance minister said that amendments in Chairman Senate and Speakers Salary Act 1975 have been made so as to correct the legal anomaly as these two office holders are also the chairmen of the finance committees of their respective houses which previously decided such matters. “(Previously) they decided it by themselves what they wanted, they were judge in their own case,” Dar said.According to the amendments, now the federal government has taken over the task of determination of the salaries, perks and privileges of the Senate chairman, National Assembly speaker and the other members of the parliament to maintain highest ethical standards, the minister said. Similarly, it has restricted the travelling allowance of parliamentarians not exceeding the aggregate of the daily conveyance and housing allowance, he added.Replying to another objection, Ishaq Dar claimed that previous government too applied the revised rates of customs, sales tax and federal excise duties soon after the announcement of the federal budget and now they were criticising the same while sitting in the opposition. He invited all the heads of parliamentary parties to sit together and decide the date for applicability of the revised tax rates by amending 19321 Act to avoid dispute in future.The minister claimed that government has upheld the Supreme Court’s June 21 decision and suspended the increased GST collection with effect from June 22 to June 30. He also challenged the claims that there would be 5 percent impact of 1 percent increase in GST. He also negated the opposition’s stance that the government has presented a mini-budget by bringing amendments in the finance bill. He said that it’s the parliamentary practice that finance bill is presented and it is amended after taking into consideration the suggestions of the parliamentarians, the stakeholders and the general public.Dar warmed opposition against indulging into negative propaganda on the “national agenda” and let the government put things in right direction within next three years and then there would be enough time for politics for them. About bank accounts information access, he said that this information would play a vital role in expansion of tax base and its use has been restricted only to chairman and members of FBR. Punishment for leaking this information by lower officials have been enhanced from 6 months to one year and fine have also been increased from Rs1 lakh to five lakhs. Similarly, standing committees of the both houses on finance would also monitor the usage of this information by FBR, he added.Expressing their strong reaction, opposition party senior legislator from PPPP Naveed Qamar expressed fears that the incumbent government would introduce mini-budgets in future. “Government has introduced a mini-budget just 20 days after announcing the annual budget, which would result in brain drain from the country,” he remarked.PTI’s Shah Mahmood Qureshi termed the imposition of GST from June 13 unconstitutional, as the Supreme Court also endorsed the opposition stance. He added that IMF raised serious questions for not fulfilling economic target even in the first budget of this government. He was of the view that incumbent government had not put attention on the proposal of the opposition.MQM’s lawmaker SA Iqbal Qadri, giving legal points, opposed the retrospective amendments in tax collection. He termed it ‘injustice to the poor people’ .He also sought ruling from the Chair on the points raised in the house by him. Taking the floor, Sheikh Rasheed Ahmed demanded more increase in government employees’ salary. He said that basic necessities like pulses and bread would become costly with imposition of raised GST. Another legislator Sahibzada Tariqullah called upon the government to introduce a judicious taxation system.

This news was published in The Nation newspaper. Read complete newspaper of 28-Jun-2013 here.